PHILIPPINES Law and Practice Contributed by: Patricia A O Bunye and Rafael Raymundo A Evangelista, Cruz Marcelo & Tenefrancia
5.2 Foreign Investment Restrictions and Approvals in the Exploration and Mining Sectors Generally, foreign investments are not required to be registered with the Bangko Sentral ng Pilipinas (BSP, the Philippine Central Bank). However, a foreign invest - ment classified as a direct investment or an inward foreign portfolio investment in a peso-denominated debt instrument issued onshore by private resident firms must be registered with the BSP. There are no restrictions on the disposition of pro - ceeds from exporting minerals and mineral products. Under BSP regulations, foreign exchange receipts or earnings of residents from exports may be used for any purpose. Such proceeds may be sold for pesos or retained or deposited in foreign currency accounts, whether in the Philippines or abroad, at the exporter’s option. 5.3 International Treaties Related to Exploration and Mining Although they are not specific to exploration and min - ing, the Philippines has so far entered into bilateral investment agreements with: • Argentina; • Australia; • Austria; • Bangladesh; • the Belgium–Luxembourg Economic Union; • Cambodia (not in force); • Canada; • Chile; • China; • the Czech Republic; • Denmark;
margin over 65% but not over 75%; and (v) 10.0% for a margin over 75%. 4.2 Tax Incentives for Mining Investors and Projects Contractors are entitled to fiscal and non-fiscal incen - tives under the OIC. The Mining Act provides that mining activities should always be included in the Investment Priorities Plan (now the SIPP). The rel - evant guidelines state that the exploration of mineral resources or the processing of minerals to produce semi-processed mineral products may qualify for reg - istration with incentives limited to capital equipment. Under the CREATE Act, income-tax incentives are now categorised according to tiers depending on the location and industry of the registered project or activ - ity. Under the 2022 SIPP, mining activities are clas - sified under Tier I, in which case registered projects or activities may enjoy an income tax holiday for up to six years, and a further ten years to avail of either the special corporate income tax or certain enhanced deductions. There are currently no tax stabilisation agreements on mining in force in the Philippines. 4.3 Transfer Tax and Capital Gains on the Sale of Mining Projects Gains realised on a transfer of licence are generally subject to income tax. Transfers through corporate structuring outside the Philippines are not subject to tax levies. 5. Mining Investment and Finance 5.1 Attracting Investment for Mining Aside from untapped mineral reserves, investors are provided with fiscal and non-fiscal incentives, such as income tax holidays, special corporate income tax and certain enhanced deductions. Furthermore, min - ing activities are included in the SIPP.
• Finland; • France; • Germany; • India; • Indonesia (not in force); • Iran (not in force); • Italy; • Kuwait; • Laos;
• Mongolia; • Myanmar;
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